Record labels are upset over Amazon's Cloud Drive announcement when the online retailer failed to address license-related negotiations

Just
yesterday, Amazon announced its new cloud-based storage service
called Cloud Drive, which is quite a feat considering the online retailer
jumped ahead of huge tech companies like Apple and Google in the race for music streaming services. But now,
the music industry is stepping in, and could possibly slow Amazon's
progress.

Cloud-based
music storage has become a popular option for those who use multiple devices.
For companies like Amazon, this method of music streaming is a great
alternative to relying on CD sales. While other companies continue working on
their versions of cloud-based services, such as Apple's
MobileMe music component called a "locker," and Google's music service that was rumored
to be released with the new Honeycomb launch (but reports are
now saying that Google execs are still in the midst of chatting with record
labels), Amazon leaped ahead of the game with Cloud Drive, which offers 5 GB of
online storage for free and saves album or MP3 purchases to the cloud
automatically.

Customers
can upgrade to 20 GB of space by purchasing an MP3 album. Also, the Cloud
Player allows users to play their music through a PC, Mac or Android-based phones.
However, those with an Apple iPhone cannot partake in Amazon's new service.

"We
hope that they'll reach a new license deal," said Liz Young, a spokeswoman
for Sony. "But we're keeping all of our legal options open."

Record
labels were informed of the new Amazon service last week, and Amazon had not
yet addressed license-related negotiations at that point. An executive close to
the Amazon discussions, who preferred to remain anonymous due to the
confidentiality of the discussions, noted that Amazon's new service might be
considered illegal to those in the music industry.

"I've
never seen a company of their size make an announcement, launch a service and simultaneously say
they're trying to get licenses," said the executive.

While
users are allowed to store music files on their own computers, it is
"unclear whether they have that right when they use remote storage
services offered by cloud computing."

A similar
situation occurred in 2007 when EMI sued MP3tunes because they offered a service
similar to Amazon's.

"The
labels have engaged in a legal terror campaign over the last 10 years using
litigation to try and slow technology progress," said Michael Robertson,
MP3tunes founder, regarding the Amazon situation.

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA